The North American Free Trade Agreement provides for two- way, long- haul trucking across the U. S.-Mexican border. U. S. truckers have objected, arguing that the Mexican trucks don’t have to meet the same environmental and safety standards as U. S. trucks. They are concerned that the combination of these lower fixed costs and lower Mexican wages will result in Mexican drivers taking business from them. Their complaints have delayed implementation of this agreement (except for a small pilot program during the Bush administration, which was ended during the Obama administration). What would be the short- run and long- run effects of allowing entry of Mexican drivers on market price and quantity and on the number of U. S. truckers?
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